divorce wife or sell house

Divorce wife have to split half of your net worth to wife wor..

Can liabilities also be shared in accordance with law?

depends on location and interrior how its furnished. i've meet some foreigners who dont mind paying at that price.

1. But have you included the costs of renovations into the "RM460k house"? If it was a subsale and the RM460k is already with renovations, I find it difficult to believe that owner would let it go.

2. Not to mention it is an 'exception' in that it has to be a foreigner. Even if we look in KL or upscale PJ, what kind of house can we buy with RM460k? Must be sub-1000sqft apartment/studio. RM3000 a month, really?

3. at 7.8% yearly rental return rate... it's not THAT high but somewhat high.

landed property at that value will most likely fetch rm1.4k rental +-

It's normal for landed properties to have lower rental yields but higher capital appreciation than high-rise. Things are not always clearcut though.

But at 8%... it's a bit high la. It's not impossible, but what is so special about it? Perhaps he has renovated it for hundreds of thousand Ringgit? Then the cost of the property shouldn't be said to be RM460k anymore la.

Where got fun by just taking 41k PL only? Should borrow at least 500k to buy high end D seg car (there's nothing to shout about your new Korean or Jap car), buy Hermes bags for your wife (since she loves u very much), n can use the balance to travel for a month (not enuf leave? Well, u can opt for unpaid leaves). Then this is what we call fun

hahaha ... good one.

@TS
Sorry to hear your case. From the #1 post, we assumed that you do not have credit card bad debts. You did not mention about your monthly expenditure such as food and consumables. And based on my POV is that (arrange by priority)

1. Sell your first house while market is hot to cover for the personal loan
2. If #1 is not enough/permitted, then sell your car. You may need a car so get a real cheap car from the second hand dealer.
3. Wait for your #2 house to be ready and move in

Take note that it's safe to keep your debts below 30% of your gross earnings, and that you should have emergency funds of 6 months to 12 months of your expenses in your bank.

This is my advise to you. I know it's harder to execute than to advise. Good luck

This post has been edited by guanteik: Nov 24 2014, 01:06 PM

If we have positive cash flow, is it still not wise to prepaid it?

1. It depends, if your interest rates with the bank is calculated at 4.4% or so, and you cannot find any other investment scheme that can give you that high an interest rate, then it would be a good idea to prepay OR to perform a capital repayment.

2. Depending on the type of loans that you are having, there are some differences between prepaying and capital repayment in terms liquidity of the money that you deposited into the bank (cannot withdraw, or needs a few days notice to withdraw, or free to withdraw at any time), and whether or not the prepayment does in fact reduces the capital thus reducing interest paid

Buy insurance for RM1m then jump down a building. Die then claim insurance to settle debt.

But seriously, you stupid or what? You are already considered a bankrupt. You still want to keep the house and the car?
Dear lord, sell it all! Once you are declared bankrupt, you might even lose your RM10k job on top of all your house, car and your RM50k.
RM50k is no big f*ck these days. Talk to the wife. Tell her the dire situation that you are in. Its either sell everything or risk becomming a bankrupt. BLR is going to go up soon btw. USA is already rising interest rates and Malaysia will follow soon.

Settle the personal loan first. Write to the bank to either reduce or waive the early prepayment penalty. Sell the car then settle the car loan. Lelong one of the house. As long as you can fetch a price above your loan value you are fine. At least you still get to keep one house and your job. Refinancing is NOT an option. With the impending interest rate hike, refinancing is going to accelerate your eventual death. Its like debts + more debts = death.

This post has been edited by Gazprom200: Nov 25 2014, 12:00 AM

Be it you have positive cash flow or negative cash flow..
Prepayment to banks is not good for you and only good for banks.

Prepayment is paying in advance.. It is not a form of capital/principal reduction.
And advance payment is not going to earn you any sort of interest.

Better to put in FD or saving account, at least some saving account still gives you 1.8% interest per annum.


Now online banking, which means banking without barrier. Even though you are overseas, you still can perform your banking there using internet.

1. Prepayments made to OCBC for example, reduces the outstanding balance and thus reduces the payable interests - making it a form of capital repayment. Other banks have similar schemes as well and all you need is to call the bank, give them your account number and let them tell you what types of prepayments that you could perform; different banking products (even the ones from the same bank) have different repayment schemes.

2. Housing loan hovers at about 4.55% and above, while FD is at 3.5%. As such it is more beneficial currently to pay up your loans. For example, if you have RM1,000 to "invest", and your option is to either save 4.55% per year (RM45.5) by prepaying your mortgage VS earning 3.5% per year (RM35.0) by investing in FDs, which one would you do?

I'm thinking that your information is grossly outdated.

This post has been edited by wild_card_my: Nov 25 2014, 08:44 AM

It depends on what kind of loan account you are referring to.

If you are talking about Semi Flexi or Full Flexi, yes I do agree..

But what about Hire Purchase account? Prepayment works?

1. Yes, I have mentioned that it depends on the loan schemes, and I even provided an example of prepayment from OCBC that will reduce the outstanding thus reducing the interest. That's why I even told them to ask the bank the kind of prepayment schemes that are available for them instead of blindly listening to the wrong advice of "Never go for prepayment for bank".

2. But you on the other hand made a blanket statement that prepayment is a loss of money, which is grossly in accurate. In my example given above, it would be much more wasteful to invest in ANY investment schemes that are giving you less than the interest rates charged by your housing loan.

3. As for the hire-purchase, first of all you made a general comment about "Never go for prepayment for bank." which is... i dont know? general and blanketed? You should have been a little more specific. Now I've already established the fact and given examples plus situations where it may be more beneficial to prepay the bank; in the spirit of being thorough and specific, let's talk about car Hire Purchase (HP):

With Hire Purchase, the calculation for the interest is based on simple-interest calculation and not reducing balance (as it is with most housing loans in Malaysia). Let's say you are buying a BMW for RM210k, with a loan of 180k. Your quoted interest rate is a low 2% for 7 years, here is how you calculate the repayment:

( [RM180k x 2% x 7 years] + 180k ) / 84 months = RM205.2k / 84 months = RM2.443k / month

As far as HP is concerned, the normal practice is that the interest payments are ALREADY calculated into your balance, that means if you were to sell the BMW the NEXT day, you are responsible to pay back the bank RM205.2k (unless there are other funny terms like lock-in period, etc.). As such, it is clear here that prepaying for your HP is trully a stupid thing to do, along with refinancing your car's HP, and to a certain extent, selling your car before you are done paying off the loans.

However, the banks have the discretion to give you a discount at the time you sell the car, consider this as part of the "rebate" to the interest that you never get to pay to the bank. But these "rebate" are solely at the discretion of the bank.

This post has been edited by wild_card_my: Nov 25 2014, 10:39 AM

Anyhow..

I think the argument got a bit mess up with the words and terms used.

DEFINITION of 'Prepayment' The satisfaction of a debt or installment payment before its official due date. A prepayment can be for the entire balance or for any upcoming payment that is paid in advance of the date for which the borrower is contractually obligated to pay it.

Capital reduction means capital reduction.

You don't put prepayment = capital reduction. It is confusing and misleading

Perhaps you are right. But then again, OCBC is calling it PREPAYMENT.

1. With OCBC, the prepayment can be used as your monthly installment if you do not pay up in the following month, but during the time it is being held by the bank and not used as the monthly installment, it reduces the O/S balance.

2. But OCBC also has capital reduction that WILL NOT be used as the installment in the even that you do not pay the monthly installment of any particular month, this also reduces the O/S balance.

Like I said, there are many type of banking products, and the issue here isn't really about terms as it is on the lack of updates about mortgage products that you are having.

This post has been edited by wild_card_my: Nov 25 2014, 11:11 AM

Does that means the prepayment money will only hold by the bank and not directly pay to developer?

Developer is already out of the picture once the property is completed and handover to customer.
The financing part is only between the bank and buyer (prop owner).

Prepayment comes in many form but let me explain in flexi-home loan for better understanding:
Let say you have outstanding loan balance (OS) of Rm100k.
You have Rm20k cash you wanna pre-pay for the loan.
So your OS becomes Rm80k. The day Rm20k was credit into your loan account, the interest calculation is base on the new OS of Rm80k.

The next day you wish to take out Rm5k from the pre-pay of Rm20. Your new OS is now Rm85k. And so the interest is calculated on Rm85k.

Property loan interest calculation is on DAILY rest. Like FD is on ANNUAL rest. Compounded DAILY or ANNUALLY. Can you imagine (hypothetical) FD is 3% on DAILY rest. Your money + interest is compounded DAILY. You make a lot of money.

But banks wanna make money mah .... so here is the real scenario
LOAN: Rm100k. Interest: 4% per annum (Compounded DAILY). 12 daysto make Rm4,074.
WRONG LIAO ... SORRY FOR INCONVINIENCE
FD: Rm100k. Interest: 4% per annum (Compounded ANNUALLY). 12 months to make Rm4,000

Understanding this concept of bank calculation, don't you think PRE-PAYMENT is a better option?
Many will look at interest per annum only but with TIME factor, banks will always beat you to the game.

This post has been edited by HuiChyr: Nov 26 2014, 12:02 AM